Question 1

Monica's Closet received payment in full within the discount period for goods sold on a $1,000 sales invoice, terms 2/10, n/30. Which entry records this payment? (Round your calculations to the nearest whole dollar.)

Accepted Answer

A)  Debit Accounts Receivable $1,000; credit Sales $1,000 
B)  Debit Cash $1,000; credit Accounts Receivable $1,000 
C)  Debit Cash $980, debit Sales Discount $20; credit Sales $1,000 
D)  Debit Cash $980, debit Sales Discount $20; credit Accounts Receivable $1,000

Question 2

Sara's Jewelry sold 40 necklaces for $35 each to a credit customer. The invoice included a 7% sales tax and payment terms of 2/10, n/30. In addition, 5 necklaces were returned prior to payment. The entry to record the original sale would include: (Round any intermediate calculations to the nearest cent, and your final answer to the nearest dollar.)

Accepted Answer

A)  a debit to Accounts Receivable for $1,498. 
B)  a debit to Accounts Receivable for $1,400. 
C)  a debit to Sales for $1,498. 
D)  a debit to Sales for $1,400.

Question 3

When using a subsidiary ledger, the Accounts Receivable account in the general ledger is called the:

Accepted Answer

A)  primary account. 
B)  subsidiary account. 
C)  receivable account. 
D)  controlling account.

Question 4

Sold Merchandise for Cash subject to a sales tax accepting cash. This will be recorded with:

Accepted Answer

A)  a credit to an asset account. 
B)  a debit to a liability account. 
C)  a debit to Capital. 
D)  None of these is correct.

Question 5

Dora's Blankets and Bedding had a sale of $600 to a charge customer, terms 2/15, n/30. Dora should record this transaction as follows: (Round intermediary calculations to the nearest cent and final answers to the whole dollar.)

Accepted Answer

A)  debit Accounts Receivable $600; credit Sales $600. 
B)  debit Cash $600; credit Sales $600. 
C)  debit Accounts Receivable $588; debit Sales Discounts $12; credit Sales $600. 
D)  debit Sales $600; credit Accounts Receivable $600.

Question 6

Terms of 3/10, n/30 means that a customer is allowed a 3% discount if he or she pays before the 10th day of the month following the sale.

Accepted Answer

A) True 
 B)False

Question 7

The principal ledger containing all the balance sheet and income statement accounts is the:

Accepted Answer

A)  general ledger. 
B)  creditors' ledger. 
C)  customers' ledger. 
D)  subsidiary ledger.

Question 8

For each of the following, identify in column 1 the category to which the account belongs, in column 2 the normal balance for the account, and in column 3 the financial statement on which the account balance is reported.
-

Accepted Answer

The answer of For each of the following, identify in...

Question 9

If a credit memorandum is issued, what account will be increased on the seller's books?

Accepted Answer

A)  Accounts Receivable 
B)  Sales 
C)  Sales Discount 
D)  Sales Returns and Allowances

Question 10

The Milk Co. had the following transactions involving the sale of merchandise. You are to prepare the necessary general journal entries. All sales are subject to a 6% sales tax. Terms of sale were n/30.
April 13 Sold merchandise priced at $600 to James Ellsworth on account.
April 14 Sold merchandise priced at $325 to a cash customer.
April 15 Sold merchandise priced at $175 to Dana Carter on account.
April 16 Sold merchandise priced at $700 to a cash customer.
April 20 The customer of April 14 returned $50 worth of merchandise for a cash refund.
April 25 Received full payment from Dana Carter.
April 30 Paid the amount of sales tax to the state.
-Prepare the necessary general journal entry for April 25.
__________________________________________ __________ __________
__________________________________________ __________ __________
__________________________________________ __________ __________

Accepted Answer

The answer of The Milk Co. had the following transactions...

Question 11

Bob sold goods for $500 to a charge customer. The customer returned for credit $35 worth of goods. Terms of the sale were 2/10, n/30. If the customer pays the amount owed within the discount period, what is the amount the customer should pay? (Round your calculations to the nearest whole dollar.)

Accepted Answer

A)  $456 
B)  $465 
C)  $500 
D)  $450

Question 12

Which of the following statements about subsidiary ledgers is most accurate?

Accepted Answer

A)  The subsidiary ledger accounts will never equal the control account in the general ledger. 
B)  The accounts receivable subsidiary ledger is a book of accounts that provides supporting detail for Accounts Receivable. 
C)  The subsidiary ledger accounts will equal the amount of cash sales. 
D)  All of these answers are correct.

Question 13

Sales Tax Payable represents an asset on the books of the seller.

Accepted Answer

A) True 
 B)False

Question 14

Secret Trails received payment in full within the credit period for horse boarding for $1,300 plus 4% sales tax. Terms of the sale were 3/10, n/30. Which entry is required to record this? (Round intermediary calculations to the nearest cent and final answers to the whole dollar.)

Accepted Answer

A)  Debit Cash, $1,300; credit Sales, $1,300 
B)  Debit Cash, $1,313; debit Sales Discount $39; credit Accounts Receivable, $1,352 
C)  Debit Cash, $1,352; credit Sales, $1,352 
D)  Debit Cash, $1,313; credit Sales, $1,313

Question 15

The Milk Co. had the following transactions involving the sale of merchandise. You are to prepare the necessary general journal entries. All sales are subject to a 6% sales tax. Terms of sale were n/30.
April 13 Sold merchandise priced at $600 to James Ellsworth on account.
April 14 Sold merchandise priced at $325 to a cash customer.
April 15 Sold merchandise priced at $175 to Dana Carter on account.
April 16 Sold merchandise priced at $700 to a cash customer.
April 20 The customer of April 14 returned $50 worth of merchandise for a cash refund.
April 25 Received full payment from Dana Carter.
April 30 Paid the amount of sales tax to the state.
-Prepare the necessary general journal entry for April 13.
__________________________________________ __________ __________
__________________________________________ __________ __________
__________________________________________ __________ __________

Accepted Answer

The answer of The Milk Co. had the following transactions...

Question 16

Determine the amount of cash collected at the time of making a sale of $1,000 worth of merchandise subject to a 3% sales tax.
$ ________

Accepted Answer

The answer of Determine the amount of cash collected at...

Question 17

Sales is a revenue account.

Accepted Answer

A) True 
 B)False

Question 18

The Milk Co. had the following transactions involving the sale of merchandise. You are to prepare the necessary general journal entries. All sales are subject to a 6% sales tax. Terms of sale were n/30.
April 13 Sold merchandise priced at $600 to James Ellsworth on account.
April 14 Sold merchandise priced at $325 to a cash customer.
April 15 Sold merchandise priced at $175 to Dana Carter on account.
April 16 Sold merchandise priced at $700 to a cash customer.
April 20 The customer of April 14 returned $50 worth of merchandise for a cash refund.
April 25 Received full payment from Dana Carter.
April 30 Paid the amount of sales tax to the state.
-Prepare the necessary general journal entry for April 16.
__________________________________________ __________ __________
__________________________________________ __________ __________
__________________________________________ __________ __________

Accepted Answer

The answer of The Milk Co. had the following transactions...

Question 19

Merchants who buy goods from wholesalers for resale to customers are:

Accepted Answer

A)  merchandisers. 
B)  retailers. 
C)  service companies. 
D)  None of the above is correct.

Question 20

Jane's Jewelry sold 50 necklaces for $30 each to a credit customer. The invoice included a 7% sales tax and payment terms of 3/10, n/30. In addition, 7 necklaces were returned prior to payment. The entry to record the payment after the discount period would include: (Round any intermediate calculations to the nearest cent, and your final answer to the nearest dollar.)

Accepted Answer

A)  a credit to Cash for $1,290. 
B)  a credit to Cash for $1,380. 
C)  a credit to Accounts Receivable for $1,290. 
D)  a credit to Accounts Receivable for $1,380.

Exam 9: Sales and Cash Receipts

Monica's Closet received payment in full within the discount period for goods sold on a $1,000 sales invoice, terms 2/10, n/30. Which entry records this payment? (Round your calculations to the nearest whole dollar.)

When using a subsidiary ledger, the Accounts Receivable account in the general ledger is called the:

Sold Merchandise for Cash subject to a sales tax accepting cash. This will be recorded with:

Dora's Blankets and Bedding had a sale of $600 to a charge customer, terms 2/15, n/30. Dora should record this transaction as follows: (Round intermediary calculations to the nearest cent and final answers to the whole dollar.)

Terms of 3/10, n/30 means that a customer is allowed a 3% discount if he or she pays before the 10th day of the month following the sale.

The principal ledger containing all the balance sheet and income statement accounts is the:

For each of the following, identify in column 1 the category to which the account belongs, in column 2 the normal balance for the account, and in column 3 the financial statement on which the account balance is reported. -

If a credit memorandum is issued, what account will be increased on the seller's books?

Bob sold goods for $500 to a charge customer. The customer returned for credit $35 worth of goods. Terms of the sale were 2/10, n/30. If the customer pays the amount owed within the discount period, what is the amount the customer should pay? (Round your calculations to the nearest whole dollar.)

Which of the following statements about subsidiary ledgers is most accurate?

Sales Tax Payable represents an asset on the books of the seller.

Secret Trails received payment in full within the credit period for horse boarding for $1,300 plus 4% sales tax. Terms of the sale were 3/10, n/30. Which entry is required to record this? (Round intermediary calculations to the nearest cent and final answers to the whole dollar.)

Determine the amount of cash collected at the time of making a sale of $1,000 worth of merchandise subject to a 3% sales tax. $ ________

Sales is a revenue account.

Merchants who buy goods from wholesalers for resale to customers are: